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Changing energy policy rules keep Colorado guessing in election year

Reed Williams and Steve Bachar both say federal government messes with business.

Reed Williams wants to drill a gas well on Colorado's Western Slope. Steve Bachar's Denver-based company is trying to sell energy-efficient systems for cooling towers. Both say federal government messes with business.

"The one thing we aren't doing well is creating predictability in the energy business," said Bachar, chief executive of Silver Bullet Water Treatment.

"It doesn't matter whether you are an oil and gas company or a renewable energy company," Bachar said.

The question now is what impact the 2012 presidential election will have on the rules.

President Barack Obama has been a supporter of renewable energy, which he argued was a job creator, while trying to balance opening public lands to oil and gas development with conservation concerns.

Obama's presumptive Republican challenger Mitt Romney is opposed to incentives for renewable energy — such as the wind- production tax credit — and for opening as much public land to drilling as possible.

This debate is not an idle one for Colorado, where 22,394 people worked in oil and gas production in 2010 and nearly 19,000 are employed in the renewable energy sector, based on state figures.

And yet from the Western Slope well fields to the Eastern Plains wind farms, Colorado, like the rest of the country, has had to cope for decades with a lack of a consistent energy policy.

"But we have too many conflicting interests," Ebinger said. "Everything is a fight."

Nowhere is the weight of the vagaries of federal energy policy now falling heavier than in the wind and solar industry, company executives say.

The specter of the loss of the wind-production tax credit — equal to $22 for every megawatt-hour a wind farm produces — will lead to a 90 percent drop in the U.S. wind market, according to IHS Emerging Energy, a consulting group.

"The reality is we are going from the best year we've had in the United States to the worst," said Steve Dayney, chief executive officer of REpower USA, the Denver-based American subsidiary of a German wind- turbine maker. "We are looking at the Grand Canyon of cliffs."

The wind industry employs about 5,000 people in Colorado. Danish Vestas Wind Systems A/S is the prime employer, with 1,700 workers in four factories. And Vestas, which is also a major customer for component factories in the state, will be forced to lay off 1,600 employees if the tax credit is not renewed, according to Ditlev Engel, the company's CEO.

Dayney said the industry is prepared to see a phase-out of the tax credit to give companies time to adjust.

The Romney campaign rejects that idea. "The question is whether wind is a good investment," said Oren Cass, a Romney adviser. "If it is a good investment, investors should be lining up, and if it isn't, the taxpayers shouldn't foot the bill."

Romney "supports any technology that is affordable," Cass said.

The Obama administration is for extending the wind tax credit and other incentives to renewable energy companies — pointing out that the oil and gas industry gets $4 billion in tax breaks.

Still, the administration's loan guarantees to aid startup solar panel makers — Solyndra and Loveland-based Abound — have drawn fire and left taxpayers on the hook for of millions of dollars.

The companies were done in by a 70 percent fall in the price of solar panels — due to low-cost Chinese imports.

The story, oil and gas industry executives say, is common across the West as regulations have increased and opposition to leasing has been fierce.

They point to a 62 percent decline in leases sold in the West in last three years — although there was also a 68 percent drop in the price of natural gas between the time Obama took office and April.

Hangover of leasesObama administration officials and environmental groups say they are dealing with a hangover of leases and permits hastily issued in the last days of President George W. Bush's administration.

"Public lands aren't just for oil and gas drilling," said Nada Culver, a senior attorney with the Wilderness Society, a conservation group.

The Obama administration put in place new leasing rules it said would increase transparency and reduce challenges. The change has tripled the time for getting a lease to a year and a half, said Kathleen Sgamma, a vice president at the trade group Western Energy Alliance.

But the number of protests once a driller got a lease dropped in 2011 to 10 percent — showing that the reforms are working, said the Wilderness Society's Culver.

Obama and Romney take very different approaches to the problems Williams, Sgamma, Culver and Hart see.

"We have to accesses our resources, but instead people have seen a sharp decline in leasing due to byzantine regulations," said Romney adviser Cass.